CBSE Class 12 Business Studies Question Paper 2024 (Set 1- 66/4/1) Available- Download Solution PDF with Answer Key

- The organizational objective of growth focuses on increasing the scale of operations, including sales volume, product range, and capital investment.

- In this case, the company seeks to expand its business to ensure long-term sustainability and market leadership.
Quick Tip: Growth ensures that the organization capitalizes on opportunities and remains competitive in the long run.

- Top-level management, such as the Chief Executive Officer (CEO), is responsible for setting organizational goals, creating strategies, and overseeing the overall functioning of the business.

- Operational management handles the day-to-day activities and works under the guidance of middle management.

- Therefore, statement % Option
(C) is incorrect because the CEO does not directly manage first-line managers.
Quick Tip: Levels of management have distinct roles: Top-level sets strategies, middle-level coordinates departments, and operational level executes tasks.

- Establishing authority and reporting relationship is an essential step in the organizing process.

- It ensures that each employee knows their reporting authority and who they are accountable to.

- This step creates a structured hierarchy, ensuring clarity in decision-making and accountability.
Quick Tip: Clear authority and reporting relationships enhance efficiency by minimizing confusion and duplication of efforts.

- Taking corrective action involves making necessary adjustments when significant deviations occur and cannot be corrected by other managerial actions.

- This step ensures that performance standards are achieved and prevents similar deviations in the future.
Quick Tip: Effective corrective action focuses on identifying root causes and implementing solutions to align performance with standards.

- Earnings are the primary source for paying dividends, as dividends are distributed from current or retained earnings.

- The amount of earnings available determines whether a company can pay dividends while retaining enough for future investments.
Quick Tip: Earnings play a crucial role in determining dividend policies, balancing shareholder returns and reinvestment needs.

- Financial intermediation refers to the process of transferring funds from savers to borrowers or investors.

- It ensures that the funds are directed toward the most productive investment opportunities in the economy.

- Examples include banks, mutual funds, and insurance companies, which facilitate the allocation of resources efficiently.
Quick Tip: Financial intermediation bridges the gap between surplus and deficit sectors, promoting economic growth and productivity.

- While directing ensures that employees perform their tasks, it does not explicitly focus on ensuring activities are performed as per plans. This is part of the controlling function.

- Directing involves guiding, supervising, and motivating employees to achieve organizational objectives.
Quick Tip: Directing focuses on motivating and guiding employees, while controlling ensures that activities align with organizational plans.

- Informal organisations help employees form social relationships, which improve their sense of belongingness and job satisfaction.

- These networks complement the formal organisation by fostering communication and cooperation among employees.
Quick Tip: Informal organisations improve morale and communication but must be managed carefully to avoid disruptions.

- Sales promotion includes short-term incentives like free samples, discounts, or offers to boost immediate sales.

- In this case, free samples distributed in schools aim to introduce the product and encourage customers to try it.
Quick Tip: Sales promotion is an effective tool for creating awareness and encouraging trial purchases in new product launches.

- Co-ordination is the process of aligning the activities of various departments and individuals to ensure they work towards common objectives.

- It ensures that efforts across the organisation are integrated to avoid duplication and conflicts.
Quick Tip: Co-ordination is a key function of management that ensures harmony among different departments for effective performance.

- A (iii): Training of intermediaries falls under the Development function as it aims to enhance the efficiency of market participants by providing them with the necessary skills.

- B (i): Regulation of takeover bids is a Regulatory function since SEBI ensures fair and transparent market practices to protect investors and maintain order.

- C (ii): Controlling insider trading and imposing penalties for such practices is a Protective function as it safeguards investors from fraudulent and unfair practices in the securities market.
Quick Tip: SEBI’s primary functions include regulation (to ensure market fairness), development (to enhance skills), and protection (to safeguard investors).

- Right to be informed: This right ensures that consumers are provided with complete and accurate information about the product they are purchasing.

- In this case, Lyka Ltd. adhered to the legal framework by providing details such as the manufacturer’s name and address, product weight, manufacturing and expiry dates, and maximum retail price. This helps consumers make an informed choice about the product.

- Providing such information fosters trust and transparency between the manufacturer and the consumer.
Quick Tip: Always check product labels for key details such as expiry date, price, and manufacturing information to make informed purchases.

- Statement I: The business environment is dynamic due to the constantly changing political, economic, social, and technological factors. However, its characteristics remain consistent across countries, making this statement false.

- Statement II: The business environment is uncertain because external changes like economic shifts or political decisions are often unpredictable. This makes the statement true.
Quick Tip: The business environment is dynamic and uncertain, requiring businesses to be adaptive and proactive in their planning.

- Demonetisation was aimed at reducing reliance on cash transactions and promoting digital payments, which strengthens the formal financial system.

- Option % Option
(D) contradicts this objective, as demonetisation encouraged savings to be directed towards the formal economy rather than away from it.

- It also aimed to improve tax compliance by reducing tax evasion and discouraging the circulation of black money.
Quick Tip: Demonetisation encourages digital transactions and formalizes the economy, leading to better tax compliance and transparency.

- The technological environment refers to the influence of advancements in technology on business operations.

- In this case, the availability of online booking systems for movie tickets demonstrates how technology has simplified the process for consumers.

- Businesses that adapt to technological advancements can improve customer convenience, enhance efficiency, and remain competitive.
Quick Tip: The technological environment constantly evolves, and businesses should leverage advancements like online platforms to enhance customer experience.

- Complaints under the Consumer Protection Act are filed based on the value of goods and compensation claimed.

- Since the value of the phone is ₹40,500, Payal can approach the District Forum/Commission, which handles cases where the compensation value is up to ₹50,00,000.

- Higher-value complaints would require filing at the State or National Commission, depending on the amount.
Quick Tip: Choose the grievance redressal forum based on the value of the claim: District Forum (up to ₹50,00,000), State Commission (₹50,00,001 to ₹2 Crore), and National Commission (above ₹2 Crore).

- Dematerialisation refers to converting physical securities into electronic form for easier storage and trading.

- This process reduces the risks associated with physical certificates, such as loss, theft, or forgery, and enhances the efficiency of securities transactions.
Quick Tip: Dematerialisation simplifies securities trading, making it secure and efficient by eliminating the need for physical certificates.

- The business environment helps firms recognize potential threats and take corrective action to mitigate risks.

- Rajat identified the ban on single-use plastics as a threat and took proactive measures to shift to eco-friendly alternatives like bamboo and palm leaves.

- Early identification of threats enabled him to sustain and grow his business despite regulatory changes.
Quick Tip: Analyzing the business environment helps firms identify both opportunities and threats, enabling timely and strategic decisions.

- Statement-I: A brand name refers to the part of a brand that can be spoken, such as the name of a product or service. For example, "Nike" or "Apple" are brand names. This statement is true.

- Statement-II: A trademark is a part of the brand that is legally protected. It includes symbols, designs, or words that distinguish a product or service. For example, the Nike swoosh is a trademark. This statement is also true.
Quick Tip: A brand name is verbal and easy to identify, while a trademark provides legal protection to the brand's unique identity.

- Primary packaging refers to the immediate container that holds the product, such as the perfume bottle itself.

- Secondary packaging is the outer box or wrapping that provides additional protection, helps in branding, and makes the product ready for display on retail shelves. The box shown in the image is an example of secondary packaging.

- Transportation packaging refers to bulk packaging used to transport goods securely. This is not relevant to the given question.
Quick Tip: Secondary packaging enhances product appeal and provides additional protection, while primary packaging directly contains the product.

The nature of management discussed in the case is Management as an Art.
Management as an art involves the skillful and personalized application of knowledge to achieve desired results. In this case, Aman, Ashish, and Ashi used their creative methods to educate slum dwellers, showcasing the artistic aspect of management. Quick Tip: Management as an art is about personalizing acquired knowledge with creativity and skill to solve real-world problems effectively.

Feature 1: Personalised Application
“They used basic knowledge in their unique manner and were able to educate the slum dwellers.”
This shows that managers apply their knowledge and skills based on individual situations and requirements.

Feature 2: Based on Practice and Creativity
“They adopted three different slums of Mumbai and started educating the slum dwellers in their own creative manner.”
This highlights that management as an art requires creativity and practice to address specific challenges effectively. Quick Tip: When discussing features of management as an art, focus on creativity, personalized application, and practical execution in diverse situations.

(i) Fixed Operating Costs

Fixed operating costs are crucial in determining financing decisions.

If a business has high fixed operating costs, it must reduce fixed financing costs such as debt financing. This is because high fixed costs increase financial risk and may lead to difficulties in fulfilling financial obligations. On the other hand, if fixed operating costs are low, the company may opt for more debt financing, as the financial risk is lower.




(ii) Cash Flow Position of the Company

A company's cash flow position significantly impacts its financing decisions.

A strong cash flow position enables a company to opt for debt financing since it ensures the ability to make interest payments and repay the principal amount on time. Conversely, a weak cash flow position may force a company to prefer equity financing to avoid fixed repayment obligations.
Quick Tip: A healthy cash flow position allows companies to choose financing options flexibly while minimizing financial risks.

The distinctions between the Primary Market and the Secondary Market are as follows (any three):

\begin{tabular{|c|p{6cm|p{6cm|
\hline
S.No. & Primary Market & Secondary Market

\hline
1 & It deals with the issue of new securities. & It deals with the sale and purchase of existing securities only.

\hline
2 & The company sells securities either directly to investors or through an intermediary. & The ownership of existing securities is exchanged between investors without the involvement of the company.

\hline
3 & It promotes capital formation directly as funds flow from savers to investors. & It promotes capital formation indirectly.

\hline
4 & Only the buying of securities takes place in the primary market. & Both buying and selling of securities can take place.

\hline
5 & Prices are determined by the management of the company. & Prices are determined by demand and supply for the securities.

\hline
6 & There is no fixed geographical location. & It is located at a specified place.

\hline
\end{tabular Quick Tip: The primary market focuses on raising new capital for the company, while the secondary market ensures liquidity for securities by allowing their trading.

The concept discussed is Training, which helps employees improve their performance and prepare for future challenges.
Quick Tip: Training is key to enhancing employee skills and adapting to technological advancements, such as Artificial Intelligence.

The benefits of training to an organisation are:

1. Training provides systematic learning, reducing wastage of time, effort, and resources compared to trial-and-error methods.

2. It enhances employee productivity in terms of quality and quantity, leading to higher profits.

3. Training equips employees to handle future managerial roles effectively during emergencies.

4. It boosts employee morale, reducing absenteeism and turnover rates.

5. It helps the organisation adapt to technological and economic changes efficiently.
Quick Tip: Invest in training programs to boost productivity, improve employee retention, and future-proof your organisation.

Planning and controlling are closely related functions of management. The relationship can be explained as follows:


1. Planning without controlling is meaningless, and controlling is blind without planning:

Once a plan is operational, controlling ensures monitoring progress, measuring deviations, and initiating corrective actions. Controlling depends on the standards set by planning. Thus, planning and controlling complement each other.


2. Planning is a prerequisite for controlling:

Controlling ensures that events conform to the plan. Without planning, there are no benchmarks to measure or evaluate performance.


3. Planning is forward-looking, while controlling is both backward and forward-looking:

Planning involves looking ahead, forecasting future conditions, and setting objectives. Controlling evaluates past performance to improve future outcomes.
Quick Tip: Planning sets the foundation for goals, while controlling ensures adherence to plans and continuous improvement.

1. Critical Point Control:

Control should focus on key result areas (KRAs) that are critical to the success of an organisation. These KRAs are identified as critical points. If anything goes wrong at these critical points, the entire organisation may suffer. Focusing on KRAs ensures that the organisation's resources are directed toward achieving the most significant objectives.




2. Management by Exception:

Management by exception, also known as control by exception, is based on the belief that trying to control everything results in controlling nothing. Instead, only significant deviations that go beyond the permissible limits should be brought to the management's notice. This approach allows managers to focus on critical issues rather than routine matters, improving efficiency and decision-making.
Quick Tip: Both 'Critical Point Control' and 'Management by Exception' help organisations prioritize key areas and avoid wasting resources on minor or non-essential issues.

1. Directing Initiates Action:

Directing initiates action as it activates the plans prepared through planning, organising, and staffing. It sets the entire management process into motion and ensures the execution of tasks.


2. Directing Takes Place at All Levels of Management:

Directing is required at every level of management. It occurs wherever there is a superior-subordinate relationship, making it an essential function at all organisational levels.


3. Directing is a Continuous Process:

Directing is an ongoing process that continues throughout the life of the organisation. It does not stop and must be performed continuously to maintain organisational effectiveness.


4. Directing Flows from Top to Bottom:

Directing flows through the organisational hierarchy. It is initiated at the top level and flows downward, ensuring that decisions and actions are properly communicated and executed.
Quick Tip: Directing is a key managerial function that ensures effective communication, motivation, and leadership at all organisational levels.

(i) Technical Jargon

Technical jargon refers to the specialized language used by experts in a specific field.

If specialists use complex technical terms while communicating with non-specialists, the receiver may not understand the meaning of these terms, resulting in a communication barrier.



(ii) Body Language and Gesture Decoding

Body language and gestures play an important role in communication. If there is a mismatch between verbal communication and non-verbal cues such as body movements or gestures, it may lead to misinterpretation.

For example, a person may say "yes" verbally but shake their head to indicate disagreement, creating confusion.
Quick Tip: To overcome semantic barriers, ensure clear communication by simplifying technical terms and aligning verbal and non-verbal cues.

(i) Selection Tests

Selection tests are mechanisms that attempt to measure certain characteristics of individuals.

These characteristics may include aptitudes, such as manual dexterity, intelligence, or personality traits, which are critical for determining job suitability.


(ii) Employment Interview

An employment interview is a formal, in-depth conversation conducted to evaluate the applicant’s suitability for the job.

The role of the interviewer is to seek relevant information, while the interviewee provides responses to demonstrate their capabilities and alignment with the job requirements.
Quick Tip: Selection tests help measure specific skills or traits, while interviews assess overall suitability, communication, and personality.

The importance of the 'Staffing' function of management includes:


1. Discovery and Recruitment of Competent Personnel: Staffing helps in discovering and obtaining qualified and competent individuals for various positions within the organisation.


2. Higher Performance: By placing the right person in the right job, staffing ensures higher efficiency and improved performance across the organisation.


3. Continuous Survival and Growth: Through effective succession planning for managerial roles, staffing ensures the organisation's continuous survival and growth in the long term.


4. Optimum Utilisation of Human Resources: Staffing helps avoid over-manning or shortages by ensuring the right balance of personnel, which leads to optimal utilisation of human resources.


5. Improved Job Satisfaction and Employee Morale: By providing fair assessment and rewards for employees' contributions, staffing enhances job satisfaction and morale.
Quick Tip: Staffing is critical for discovering talent, placing employees efficiently, and maintaining organisational growth and employee satisfaction.

N/A

1. Safety/Security Needs: These include security and protection from physical and emotional harm, as provided by job stability.

2. Esteem Needs: These include self-respect, status, and recognition, which were fulfilled by the appreciation shown through the award given to Ekta.
Quick Tip: Job security meets employees’ safety needs, while recognition boosts their esteem, enhancing overall motivation and productivity.

(a) Level of Competition

A higher level of competition increases the need for working capital.

It may require a company to maintain higher stocks of finished goods to meet urgent customer demands. Additionally, competition often necessitates liberal credit terms to retain customers, further increasing working capital requirements.




(b) Inflation

Inflation raises the prices of raw materials, labour, and other inputs, increasing the working capital requirements of a company.

Higher amounts are required to maintain the same level of production and sales during periods of inflation.
Quick Tip: Higher competition requires more stock and credit flexibility, while inflation increases working capital due to rising costs.

N/A

1. Replacement of the Product: The defective packet can be replaced with a new one that is free from defects.

2. Refund of the Price Paid: Nishi may be refunded the amount paid for the defective product.
Quick Tip: As a consumer, always check product details and act promptly by filing a complaint if goods are found defective or misleading.

1. Stock Market Conditions:

If the stock market is bullish, companies prefer raising equity capital as shares can be sold more easily, often at a higher price. This is why Kaysons Ltd. opted for a public issue of shares.


2. Control:

Issuing additional equity reduces the existing management's holding in the company, potentially diluting control over business decisions.


3. Floatation Costs:

Raising funds through equity involves significant costs such as underwriting fees, advertising, and compliance expenses, which influence the decision.


4. Regulatory Framework:

The company had to ensure compliance with SEBI guidelines while issuing shares, highlighting the importance of considering the regulatory framework when deciding the capital structure.
Quick Tip: Factors like stock market conditions, control, cost, and regulatory compliance are critical when deciding on a capital structure.

(i) Strategy
A strategy is a comprehensive plan designed to accomplish an organisation's objectives.

Taking into account the business environment, it provides the broad contours of an organisation’s business and includes:

- Determining long-term objectives

- Adopting a particular course of action

- Allocating resources necessary to achieve the objectives


(ii) Method

Methods refer to the prescribed ways or manners in which tasks are to be performed to achieve objectives.

The methods may vary depending on the nature of the task, ensuring uniformity and efficiency in execution.


(iii) Budget

A budget is a statement of expected results expressed in numerical terms.

It quantifies future facts and figures, serving as a financial plan for efficient resource allocation.
Quick Tip: Types of plans like strategy, methods, and budgets ensure structured planning and resource optimisation in organisations.

(i) Planning may not work in a dynamic environment:

The business environment is dynamic, and organisations must constantly adapt to changes.

It becomes difficult to accurately assess future trends due to the unpredictable nature of the environment, making planning less effective in such situations.




(ii) Planning leads to rigidity:

In an organisation, a well-defined plan is drawn up with specific goals to be achieved.

This can lead to rigidity as managers may not have the flexibility to adapt to changing circumstances. Flexibility is essential for coping with unexpected situations.




(iii) Planning is a time-consuming process:

Planning requires significant time to gather information, analyse options, and make decisions.

As a result, there may be little time left for the actual implementation of the plans, especially in fast-changing environments.
Quick Tip: While planning is essential, organisations should incorporate flexibility and efficiency in the planning process to adapt to dynamic environments and reduce delays.

Principle of Scientific Management: Development of Each and Every Person to His or Her Greatest Efficiency and Prosperity

Taylor believed that each individual should be scientifically selected and assigned tasks suited to their physical, mental, and intellectual capabilities.

To enhance efficiency, employees should be given proper training, which would ensure their growth as well as the prosperity of the organisation.



Techniques of Scientific Management:

1. Method Study:

The objective of method study is to find the one best way of performing a task.

This helps minimise production costs while maximising quality and customer satisfaction. Techniques like process charts and operations research are used for this purpose.


2. Standardisation:

Standardisation involves setting benchmarks for business activities, such as processes, raw materials, machinery, or working conditions.

Adherence to these standards ensures uniformity and consistency in production.
Quick Tip: Scientific management focuses on maximising efficiency through principles like method study, standardisation, and employee development.

(i) Marketing Planning

Marketing planning involves developing appropriate marketing plans to achieve organisational objectives.

It includes plans for increasing production levels, promoting products, and specifying action programmes for execution.




(ii) Branding

Branding refers to the process of assigning a name, sign, or symbol to a product to help identify and distinguish it from competitors.

Branding decisions include whether each product will have a separate brand name or if the same name will extend to all products.




(iii) Pricing

Pricing refers to the amount of money customers must pay to obtain a product.

Typically, lower prices lead to higher demand, while higher prices may reduce demand.
Quick Tip: Functions like marketing planning, branding, and pricing ensure product visibility, customer satisfaction, and revenue generation.

1. Advertising:

Advertising is an impersonal form of communication paid for by marketers (sponsors) to promote goods or services.

The most common modes of advertising include newspapers, magazines, television, and radio.



2. Sales Promotion:

Sales promotion refers to short-term incentives designed to encourage buyers to make immediate purchases of a product or service.

Activities under sales promotion include offering cash discounts, sales contests, free gift offers, and free sample distribution.




3. Public Relations:

Public relations involve various programmes aimed at promoting or protecting a company’s image and its individual products in the public's eyes.

Public relations are particularly useful when there is negative publicity about the company or its products.
Quick Tip: The promotion mix elements—advertising, sales promotion, and public relations—work together to build awareness, drive sales, and manage a company's reputation.

(a) Concept Identified: Delegation
Delegation is the process of granting authority to subordinates to carry out specific tasks within defined limits.




(b) Importance of Delegation:

1. Effective Management: Delegation allows managers to focus on higher-priority tasks by assigning routine work to subordinates.

2. Employee Development: It provides subordinates with opportunities to develop skills and gain experience.

3. Motivation of Employees: Delegation enhances employee morale and motivation by providing authority and responsibility.

4. Facilitation of Growth: It ensures efficient operations and enables the organisation to expand.

5. Better Coordination: Delegation ensures clarity in roles and responsibilities, improving coordination.
Quick Tip: Delegation empowers employees, enhances management efficiency, and facilitates organisational growth.